2008-07-24 07:30:00
First Niagara Financial Group Reports 2008 Second Quarter Results
LOCKPORT, N.Y., July 24 /EMWNews/ -- -- Strong operating results of $0.22 per share - 16% above first quarter -- Robust revenue growth led by 17 basis point net interest margin improvement
-- Commercial loan growth continues at double digit pace -- Solid credit track record remains intact -- Quarterly dividend declared of $0.14 per share - 8% above a year ago First Niagara Financial Group, Inc. (Nasdaq: FNFG), today announced 2008 second quarter net income from operations rose by 16% to $23.1 million or $0.22 per diluted share, $3.1 million or $0.03 per diluted share above last quarter. Compared to a year ago, net income from operations improved by $1.5 million or $0.01 per diluted share. Reported net income (GAAP) for the second quarter increased by $4.3 million or $0.04 per diluted share from the linked quarter and $6.5 million or $0.06 per diluted share from the 2007 second quarter.
Non-GAAP/ Operating Results (excluding non-recurring items) Q2 2008 Q1 2008 Q2 2007 Net interest income $66.6 $60.1 $57.1 Provision for credit losses 4.9 3.1 2.3 Noninterest income 29.6 29.3 30.3 Noninterest expense 56.6 55.5 52.8 Net income from operations 23.1 20.0 21.6 Net income per diluted share $0.22 $0.19 $0.21 Reported Results (GAAP) (including non-recurring items) Q2 2008 Q1 2008 Q2 2007 Net interest income $66.6 $60.1 $57.1 Provision for credit losses 4.9 3.1 2.3 Noninterest income 29.6 29.3 30.3 Noninterest expense 56.6 57.5 60.3 Net income 23.1 18.8 16.6 Net income per diluted share $0.22 $0.18 $0.16 All amounts in millions except net income per diluted share The Non-GAAP/Operating Results table above summarizes the Company's operating results excluding certain non-recurring items. Q1 2008: Noninterest expense -- real estate write-downs and severance related to the acquisition of Greater Buffalo Savings Bank of $2.0 million. Q2 2007: Noninterest expense -- real estate write-downs and severance costs of $7.5 million related to prior year's performance improvement initiative. The Company believes these non- GAAP financial measures provide a meaningful comparison of the underlying operational performance of the Company, and facilitates investors' assessments of business and performance trends in comparison to others in the financial services industry. In addition, the Company believes the exclusion of these items enables management to perform a more effective evaluation and comparison of the Company's results and to assess performance in relation to the Company's ongoing operations. John R. Koelmel, President and CEO, said, "We are very pleased with our performance in the second quarter and the momentum that continues to build throughout First Niagara. Our commercial services franchise is firing on all cylinders, retail banking is focused on deepening customer relationships and our fee businesses are vigorously moving forward. Our resolve to bring a sharp profitability focus to all that we do is clearly paying off. Greater Buffalo Savings Bank has been fully integrated and their customers and employees are proving to be terrific additions to our company. While we will steadfastly maintain our vigilance and credit discipline in these uncertain times, we are continuing to aggressively pursue our competitive advantages in our Upstate New York markets, which are faring better economically than many others." Chief Financial Officer, Michael W. Harrington, added, "Our second quarter results were marked by excellent revenue and loan growth, solid credit quality, and improved operating leverage. Operating revenues reached record levels, reflecting the benefits of our realignment of resources to priority growth businesses. The substantial improvement in our net interest margin is a direct result of this realignment as well as our pricing discipline and liability management efforts. Our credit experience continues to compare very favorably within the industry, with loan loss reserves and capital remaining at strong levels. We are also managing our expense base intelligently and, overall, are well positioned to sustain long-term growth." Loans Excluding the effect of the Greater Buffalo Savings Bank ("Great Lakes") acquisition completed in the first quarter, average commercial loan balances rose by an annualized 15% over the linked quarter, the 5th consecutive quarter of double digit growth. Commercial business loans grew at an annualized rate of 29% which was driven by strong state-wide production combined with historically low payoff levels. Commercial real estate loan balances posted a solid 12% annualized gain, also benefiting from strong originations and line advances as well as a limited number of unscheduled payoffs. Compared to the second quarter of 2007, commercial loan balances were higher by 15% and now comprise over 55% of total loans. Home equity average balances increased by $10 million or 7% annualized due to strong seasonal demand and successful marketing efforts. Residential mortgage average balances trended downward by $52 million or 10% annualized given the ongoing consumer preference for long- term, fixed rate products which the Company does not hold in its portfolio. Credit Quality Non-performing loans increased modestly by $1 million for the quarter and remained at 0.53% of total loans. Net charge-offs increased by $2.1 million from the previous quarter to $4.1 million or 0.26% of average loans. While this increase was attributable to a select few commercial real estate and commercial business loans, it is more indicative of expected loss trends. The provision for credit losses was $4.9 million for the quarter, compared to $3.1 million in the prior quarter and $2.3 million a year ago. At June 30, 2008, the allowance for credit losses represented 1.17% of total loans and 218% of non-performing loans. Deposits Average deposit balances, after adjusting for the impact of the Great Lakes acquisition, remained stable from the linked quarter. Growth in money market deposits continued as average balances increased by $170 million from the linked quarter and $562 million over a year ago. The Company's continuing focus on disciplined pricing and profitable relationships, as well as consumer preference for more liquid funds, resulted in the $152 million decline in higher cost CD balances. Non-interest bearing deposits grew by $34 million or 21% annualized reflecting solid growth in business checking balances. Average deposit balances were flat from a year ago as strong municipal and core deposit growth were offset by a reduction in higher yielding CD balances. Net Interest Income Net interest income grew significantly by $6.5 million, or 11% above last quarter, to $66.6 million and benefited from the continued reduction in funding costs which brought the rate on interest bearing liabilities to its lowest level in over two years. Much of this improvement is attributable to the Company's concerted efforts to better position its funding mix as evidenced by sharp declines in higher yielding CD balances, growth in lower priced core deposits and continued use of wholesale borrowings as an attractive alternative to higher priced CDs. The net benefit of these factors resulted in an increase of 17 basis points in the tax equivalent net interest margin to 3.50% for the quarter, the widest spread seen in over six quarters. Noninterest Income Noninterest income of $29.6 million grew by 1% from last quarter as higher seasonal activity from electronic banking and wealth management services exceeded the impact of the first quarter recognition of partnership investment gains. Noninterest income for the current quarter was 2% below 2007's level primarily due to the continuing industry-wide softening in insurance renewal rates. Noninterest Expense Noninterest expense of $56.6 million increased by 2% over the previous quarter primarily due to the full quarter inclusion of Great Lakes within the Company's expense base. However, the efficiency ratio improved from 64% to 59% from the linked quarter, the lowest level seen in over six quarters. Capital Management The tangible common equity ratio at June 30 was 7.6%, consistent with the level at March 31 and the Company still remains well capitalized. No shares of the Company's stock were repurchased during the second quarter. The Board of Directors declared a quarterly dividend of fourteen cents ($0.14) per share on outstanding FNFG common stock, consistent with the prior quarter's level and 8% above a year ago. The dividend is payable on August 19, 2008 to stockholders of record on August 5, 2008. Profile -- First Niagara Financial Group, Inc., through its wholly owned subsidiary First Niagara Bank, has assets of $9.1 billion and deposits of $6.2 billion. First Niagara Bank is a full-service, community-focused bank that provides financial services to individuals, families and businesses through 114 branches and four Regional Market Centers across Upstate New York. For more information, visit http://www.fnfg.com. Conference Call -- A conference call will be held at 11 a.m. Eastern Time on Thursday, July 24, 2008 to discuss the Company's financial results and business strategy. Those wishing to participate in the call may dial toll-free 1-877-709-8150. A replay of the call will be available until August 7, 2008 by dialing 1-877-660-6853, account number 240, ID number 290658. Forward-Looking Statements -- This press release contains forward-looking statements with respect to the financial condition and results of operations of First Niagara Financial Group, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward- looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans that could result from an economic downturn; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses; and (7) increased risk associated with an increase in commercial real-estate and business loans and non-performing loans.
First Niagara Financial Group, Inc. Summary of Quarterly Financial Data 2008 June 30, March 31, SELECTED FINANCIAL DATA (Amounts in thousands) Securities available for sale $1,289,738 1,414,774 Loans and leases: Commercial: Real estate $2,468,932 2,388,769 Business $906,810 863,152 ---------- --------- Total commercial loans $3,375,742 3,251,921 Residential real estate $2,094,813 2,149,363 Home equity $589,846 564,164 Other consumer $162,603 173,264 Specialized lending $181,683 174,476 Net deferred costs and discounts $34,106 34,980 ---------- --------- Total loans and leases $6,438,793 6,348,168 Allowance for credit losses $75,128 74,283 ---------- --------- Loans and leases, net $6,363,665 6,273,885 Goodwill and other intangibles $806,327 808,262 Total assets $9,074,502 9,067,701 Total interest-earning assets $7,825,324 7,813,212 Deposits: Savings $811,160 795,464 Interest-bearing checking $505,656 509,121 Money market deposits $1,974,430 1,885,113 Noninterest-bearing $728,839 680,397 Certificates $2,138,148 2,367,176 ---------- --------- Total deposits $6,158,233 6,237,271 Borrowings $1,363,379 1,265,521 Total interest-bearing liabilities $6,792,773 6,822,395 Net interest-earning assets $1,032,551 990,817 Stockholders' equity $1,431,352 1,432,632 Tangible equity (1) $625,025 624,370 Securities available for sale fair value adjustment included in stockholders' equity $(6,011) 5,853 Common shares outstanding 109,722 109,703 Treasury shares 15,697 15,718 Total loans serviced for others $570,614 571,707 CAPITAL Tier 1 risk based capital 10.08% 9.84% Total risk based capital 11.30% 11.06% Tier 1 (core) capital 7.61% 7.29% Tangible capital 7.61% 7.29% Equity to assets 15.77% 15.80% Tangible equity to tangible assets(1) 7.56% 7.56% Book value per share (2) $13.51 13.54 Tangible book value per share (1)(2) $5.90 5.90 ASSET QUALITY DATA (Amounts in thousands) Non-performing loans: Commercial real estate $20,456 19,921 Commercial business $4,095 3,518 Residential real estate $4,957 5,113 Home equity $927 1,180 Other consumer $528 832 Specialized lending $3,430 2,872 ------- ------ Total non-performing loans $34,393 33,436 Real estate owned $1,414 976 ------- ------ Total non-performing assets $35,807 34,412 Net loan charge-offs $4,055 1,954 Net charge-offs to average loans (annualized) 0.26% 0.13% Provision for credit losses $4,900 3,100 Provision for credit losses as a percentage of average loans (annualized) 0.31% 0.21% Total non-performing loans to total loans 0.53% 0.53% Total non-performing assets as a percentage of total assets 0.39% 0.38% Allowance for credit losses to total loans 1.17% 1.17% Allowance for credit losses to non-performing loans 218.4% 222.2% Personnel FTE 1,892 1,903 Number of branches 114 115 2007 December 31, September 30, June 30, March 31, SELECTED FINANCIAL DATA (Amounts in thousands) Securities available for sale $1,217,164 1,262,193 1,070,842 1,095,012 Loans and leases: Commercial: Real estate $2,195,009 2,150,885 2,098,245 2,065,472 Business $730,029 667,512 651,758 611,064 ---------- --------- --------- --------- Total commercial loans $2,925,038 2,818,397 2,750,003 2,676,536 Residential real estate $1,955,690 1,998,411 2,190,984 2,224,704 Home equity $503,779 507,834 498,200 472,714 Other consumer $127,169 135,697 134,282 151,885 Specialized lending $183,747 188,684 186,856 163,319 Net deferred costs and discounts $29,529 29,531 29,962 27,747 ---------- --------- --------- --------- Total loans and leases $5,724,952 5,678,554 5,790,287 5,716,905 Allowance for credit losses $70,247 70,970 71,102 71,051 ---------- --------- --------- --------- Loans and leases, net $5,654,705 5,607,584 5,719,185 5,645,854 Goodwill and other intangibles $750,071 753,336 750,732 753,296 Total assets $8,096,228 8,114,960 8,020,806 7,982,589 Total interest-earning assets $6,994,022 7,007,391 6,938,584 6,903,315 Deposits Savings $786,759 844,576 906,852 936,496 Interest-bearing checking $468,165 499,058 502,925 511,169 Money market deposits $1,607,137 1,437,272 1,372,358 1,394,016 Noninterest-bearing $631,801 658,012 656,195 623,504 Certificates $2,055,122 2,266,535 2,317,116 2,333,891 ---------- --------- --------- --------- Total deposits $5,548,984 5,705,453 5,755,446 5,799,076 Borrowings $1,094,981 947,055 797,574 716,463 Total interest-bearing liabilities $6,012,164 5,994,496 5,896,825 5,892,035 Net interest-earning assets $981,858 1,012,895 1,041,759 1,011,280 Stockholders' equity $1,353,179 1,332,313 1,329,063 1,353,792 Tangible equity (1) $603,108 578,977 578,331 600,496 Securities available for sale fair value adjustment included in stockholders' equity $(24) (10,039) (15,433) (11,161) Common shares outstanding $104,770 105,371 106,209 108,120 Treasury shares $15,274 14,674 13,835 11,925 Total loans serviced for others $553,631 554,934 392,597 398,166 CAPITAL Tier 1 risk based capital 10.10% 10.40% 10.36% 10.69% Total risk based capital 11.35% 11.65% 11.61% 11.94% Tier 1 (core) capital 7.54% 7.68% 7.73% 7.75% Tangible capital 7.54% 7.68% 7.73% 7.75% Equity to assets 16.71% 16.42% 16.57% 16.96% Tangible equity to tangible assets(1) 8.21% 7.86% 7.95% 8.31% Book value per share (2) $13.41 13.14 13.01 13.02 Tangible book value per share (1)(2) $5.98 5.71 5.66 5.77 ASSET QUALITY DATA (Amounts in thousands) Non-performing loans: Commercial real estate $16,229 18,169 9,869 6,937 Commercial business $3,430 2,718 5,546 5,653 Residential real estate $3,741 3,836 4,425 3,713 Home equity $849 545 836 1,088 Other consumer $885 1,307 1,232 1,816 Specialized lending $2,920 2,596 2,283 1,880 ------- ------ ------ ------ Total non-performing loans $28,054 29,171 24,191 21,087 Real estate owned $237 244 169 553 ------- ------ ------ ------ Total non-performing assets $28,291 29,415 24,360 21,640 Net loan charge-offs $3,223 2,150 2,249 2,462 Net charge-offs to average loans (annualized) 0.22% 0.15% 0.16% 0.18% Provision for credit losses $2,500 2,100 2,300 1,600 Provision for credit losses as a percentage of average loans (annualized) 0.17% 0.14% 0.16% 0.11% Total non-performing loans to total loans 0.49% 0.51% 0.42% 0.37% Total non-performing assets as a percentage of total assets 0.35% 0.36% 0.30% 0.27% Allowance for credit losses to total loans 1.23% 1.25% 1.23% 1.24% Allowance for credit losses to non-performing loans 250.4% 243.3% 293.9% 336.9% Personnel FTE 1,824 1,840 1,884 1,915 Number of branches 110 120 121 119 First Niagara Financial Group, Inc. Summary of Quarterly Financial Data (Cont'd) 2008 2007 Year-to- Year Ended Date Second First December June 30 Quarter Quarter 31, SELECTED OPERATIONS DATA (Amounts in thousands) Interest income $221,389 111,402 109,987 422,772 Interest expense $94,718 44,793 49,925 198,594 -------- ------- ------- ------- Net interest income $126,671 66,609 60,062 224,178 Provision for credit losses $8,000 4,900 3,100 8,500 -------- ------- ------- ------- Net interest income after provision for credit losses $118,671 61,709 56,962 215,678 Noninterest income: Banking services $19,265 9,955 9,310 39,289 Insurance & Benefits Consulting $25,891 13,129 12,762 51,646 Wealth management services $5,077 2,860 2,217 9,494 Lending and leasing $4,480 2,225 2,255 8,880 Bank-owned life insurance $2,432 1,255 1,177 4,848 Other $1,758 212 1,546 17,654 -------- ------- ------- ------- Total noninterest income $58,903 29,636 29,267 131,811 Noninterest expense: Salaries and benefits $67,263 33,844 33,419 125,697 Occupancy and equipment $12,972 5,812 7,160 28,550 Technology and communications $9,939 4,932 5,007 19,456 Marketing and advertising $4,964 2,462 2,502 8,362 Professional services $1,997 925 1,072 4,392 Amortization of intangibles $4,460 2,209 2,251 10,433 Other $12,506 6,410 6,096 25,576 -------- ------- ------- ------- Total noninterest expense $114,101 56,594 57,507 222,466 Income before income taxes $63,473 34,751 28,722 125,023 Income taxes $21,581 11,672 9,909 40,938 -------- ------- ------- ------- Net income $41,892 23,079 18,813 84,085 ======== ======= ======= ======= STOCK AND RELATED PER SHARE DATA Net income per share: Basic $0.40 0.22 0.18 0.82 Diluted $0.40 0.22 0.18 0.81 Cash dividends $0.28 0.14 0.14 0.54 Dividend payout ratio 70.00% 63.64% 77.78% 65.85% Dividend yield (annualized) 4.38% 4.38% 4.14% 4.49% Market price (Nasdaq: FNFG): High $15.00 15.00 14.15 15.13 Low $9.98 12.60 9.98 11.15 Close $12.86 12.86 13.59 12.04 SELECTED RATIOS Net income (annualized): Return on average assets 0.95% 1.02% 0.88% 1.05% Return on average equity 5.95% 6.46% 5.42% 6.24% Return on average tangible equity (1) 13.38% 14.75% 12.01% 14.12% Noninterest income as a percentage of net revenue 31.74% 30.79% 32.76% 37.03% Efficiency ratio - Consolidated 61.5% 58.8% 64.4% 62.5% - Banking segment (3) 57.1% 54.2% 59.8% 58.6% Net loan charge-offs 6,009 4,055 1,954 10,084 Net charge-offs to average loans (annualized) 0.19% 0.26% 0.13% 0.18% Provision for credit losses as a percentage of average loans (annualized) 0.26% 0.31% 0.21% 0.15% First Niagara Financial Group, Inc. Summary of Quarterly Financial Data (Cont'd) 2007 Fourth Third Second First Quarter Quarter Quarter Quarter SELECTED OPERATIONS DATA (Amounts in thousands) Interest income $107,120 106,911 105,543 103,198 Interest expense $51,913 51,206 48,477 46,998 ------- ------- ------- ------- Net interest income $55,207 55,705 57,066 56,200 Provision for credit losses $2,500 2,100 2,300 1,600 ------- ------- ------- ------- Net interest income after provision for credit losses $52,707 53,605 54,766 54,600 Noninterest income: Banking services $10,112 10,071 10,111 8,995 Insurance & Benefits Consulting $11,563 13,345 13,722 13,016 Wealth management services $2,247 2,412 2,632 2,203 Lending and leasing $2,604 2,191 2,181 1,904 Bank-owned life insurance $1,088 1,144 1,561 1,055 Other $16,211 567 137 739 ------- ------- ------- ------- Total noninterest income $43,825 29,730 30,344 27,912 Noninterest expense: Salaries and benefits $30,269 30,159 32,377 32,892 Occupancy and equipment $5,540 5,544 11,484 5,982 Technology and communications $4,942 4,770 4,905 4,839 Marketing and advertising $2,632 2,121 1,921 1,688 Professional services $1,182 1,243 1,158 809 Amortization of intangibles $2,533 2,570 2,639 2,691 Other $8,489 5,541 5,806 5,740 ------- ------- ------- ------- Total noninterest expense $55,587 51,948 60,290 54,641 Income before income taxes $40,945 31,387 24,820 27,871 Income taxes $13,108 10,284 8,209 9,337 ------- ------- ------- ------- Net income $27,837 21,103 16,611 18,534 ======= ======= ======= ======= STOCK AND RELATED PER SHARE DATA Net income per share: Basic $0.27 0.21 0.16 0.18 Diluted $0.27 0.21 0.16 0.17 Cash dividends $0.14 0.14 0.13 0.13 Dividend payout ratio 51.85% 66.67% 81.25% 72.22% Dividend yield (annualized) 4.61% 3.93% 3.98% 3.79% Market price (Nasdaq: FNFG): High $15.13 14.60 14.28 15.07 Low $11.15 11.49 12.88 13.53 Close $12.04 14.15 13.10 13.91 SELECTED RATIOS Net income (annualized): Return on average assets 1.36% 1.04% 0.84% 0.95% Return on average equity 8.26% 6.31% 4.93% 5.47% Return on average tangible equity (1) 18.87% 14.56% 11.09% 12.10% Noninterest income as a percentage of net revenue 44.25% 34.80% 34.71% 33.18% Efficiency ratio - Consolidated 56.1% 60.8% 69.0% 65.0% - Banking segment (3) 50.6% 57.0% 68.6% 61.7% Net loan charge-offs 3,223 2,150 2,249 2,462 Net charge-offs to average loans (annualized) 0.22% 0.15% 0.16% 0.18% Provision for credit losses as a percentage of average loans (annualized) 0.17% 0.14% 0.16% 0.11% First Niagara Financial Group, Inc. Summary of Quarterly Financial Data (Cont'd) 2008 2007 Year-to- Year Ended Date Second First December June 30 Quarter Quarter 31, SELECTED AVERAGE BALANCES (Amounts in thousands) Securities, at amortized cost $1,322,382 1,335,744 1,309,020 1,135,221 Loans (4) Commercial: Real estate $2,367,802 2,434,075 2,301,529 2,101,431 Business $842,624 890,154 795,092 639,580 ---------- --------- --------- --------- Total commercial loans $3,210,426 3,324,229 3,096,621 2,741,011 Residential $2,097,578 2,131,922 2,063,235 2,158,696 Home equity $561,819 581,834 541,804 498,039 Other consumer $165,105 173,426 156,784 145,501 Specialized lending $185,042 183,469 186,616 182,691 ---------- --------- --------- --------- Total loans $6,219,970 6,394,880 6,045,060 5,725,938 Total interest-earning assets $7,615,885 7,805,792 7,425,978 6,915,138 Goodwill and other intangibles $786,154 807,034 765,275 752,462 Total assets $8,854,843 9,115,902 8,593,783 7,997,299 Interest-bearing liabilities: Savings accounts $793,819 804,834 782,804 889,398 Checking $481,403 494,395 468,411 487,173 Money market deposits $1,843,205 1,932,942 1,753,468 1,413,178 Certificates of deposit $2,242,432 2,249,847 2,235,016 2,263,933 Borrowed funds $1,257,852 1,309,847 1,205,857 853,297 ---------- --------- --------- --------- Total interest-bearing liabilities $6,618,711 6,791,865 6,445,556 5,906,979 Noninterest-bearing deposits $658,083 688,403 627,762 627,259 Total deposits $6,018,942 6,170,421 5,867,461 5,680,941 Total liabilities $7,438,998 7,679,743 7,198,252 6,649,427 Net interest-earning assets $997,174 1,013,927 980,422 1,008,159 Stockholders' equity $1,415,845 1,436,159 1,395,531 1,347,872 Tangible equity (1) $629,691 629,125 630,256 595,410 Common shares outstanding (2): Basic 104,558 105,884 103,230 102,838 Diluted 105,074 106,523 103,641 103,472 SELECTED AVERAGE YIELDS/RATES (Tax equivalent basis) Securities, at amortized cost 5.02% 5.04% 5.00% 4.49% Loans Commercial: Real estate 6.37% 6.27% 6.48% 6.80% Business 6.05% 5.64% 6.50% 7.59% ----- ----- ----- ----- Total commercial loans 6.28% 6.10% 6.48% 6.99% Residential 5.56% 5.52% 5.60% 5.61% Home equity 6.16% 5.84% 6.50% 6.95% Other consumer 7.36% 7.25% 7.49% 7.66% Specialized lending 7.81% 7.72% 7.89% 8.61% Total loans 6.10% 5.96% 6.25% 6.53% Total interest-earning assets 5.92% 5.81% 6.03% 6.20% Savings accounts 0.30% 0.27% 0.33% 0.44% Interest-bearing checking 0.31% 0.30% 0.33% 0.42% Money market deposits 2.60% 2.27% 2.98% 3.70% Certificates of deposit 3.85% 3.55% 4.16% 4.47% Borrowed funds 4.13% 4.02% 4.26% 4.58% Total interest-bearing liabilities 2.87% 2.65% 3.11% 3.36% Tax equivalent net interest rate spread 3.05% 3.16% 2.92% 2.84% Tax equivalent net interest rate margin 3.42% 3.50% 3.33% 3.33% First Niagara Financial Group, Inc. Summary of Quarterly Financial Data (Cont'd) 2007 Fourth Third Second First Quarter Quarter Quarter Quarter SELECTED AVERAGE BALANCES (Amounts in thousands) Securities, at amortized cost $1,251,346 1,112,741 1,089,189 1,086,037 Loans (4) Commercial: Real estate $2,185,998 2,112,119 2,068,315 2,037,544 Business $692,448 652,751 631,884 579,853 ---------- --------- --------- --------- Total commercial loans $2,878,446 2,764,870 2,700,199 2,617,397 Residential $1,986,546 2,179,767 2,217,959 2,253,212 Home equity $514,655 509,747 490,616 476,591 Other consumer $135,524 136,990 144,449 165,462 Specialized lending $194,919 194,143 180,100 161,104 ---------- --------- --------- --------- Total loans $5,710,090 5,785,517 5,733,323 5,673,766 Total interest-earning assets $7,021,393 6,952,003 6,872,508 6,811,941 Goodwill and other intangibles $751,955 752,422 752,007 753,483 Total assets $8,116,588 8,044,675 7,940,621 7,884,237 Interest-bearing liabilities: Savings accounts $813,084 881,145 921,747 943,137 Checking $476,721 482,838 492,312 497,094 Money market deposits $1,581,043 1,393,680 1,369,121 1,306,061 Certificates of deposit $2,168,218 2,286,634 2,311,348 2,290,626 Borrowed funds $986,725 889,375 764,987 769,314 ---------- --------- --------- --------- Total interest-bearing liabilities $6,025,791 5,933,672 5,859,515 5,806,232 Noninterest-bearing deposits $644,680 657,366 616,537 589,517 Total deposits $5,683,746 5,701,663 5,711,065 5,626,435 Total liabilities $6,779,481 6,717,283 6,587,797 6,509,433 Net interest-earning assets $995,602 1,018,331 1,012,993 1,005,709 Stockholders' equity $1,337,107 1,327,392 1,352,824 1,374,804 Tangible equity (1) $585,152 574,970 600,817 621,321 Common shares outstanding (2): Basic 101,274 101,472 103,373 105,294 Diluted 101,757 102,059 104,031 106,004 SELECTED AVERAGE YIELDS/RATES (Tax equivalent basis) Securities, at amortized cost 4.72% 4.54% 4.40% 4.26% Loans Commercial: Real estate 6.73% 6.80% 6.84% 6.85% Business 7.26% 7.73% 7.70% 7.69% ----- ----- ----- ----- Total commercial loans 6.86% 7.02% 7.04% 7.04% Residential 5.62% 5.61% 5.57% 5.62% Home equity 6.85% 6.96% 7.00% 7.00% Other consumer 7.81% 7.91% 7.55% 7.42% Specialized lending 8.16% 8.22% 9.67% 8.45% Total loans 6.49% 6.54% 6.57% 6.52% Total interest-earning assets 6.18% 6.22% 6.22% 6.16% Savings accounts 0.35% 0.35% 0.43% 0.62% Interest-bearing checking 0.40% 0.37% 0.37% 0.53% Money market deposits 3.79% 3.76% 3.65% 3.56% Certificates of deposit 4.39% 4.51% 4.53% 4.44% Borrowed funds 4.65% 4.78% 4.44% 4.38% Total interest-bearing liabilities 3.41% 3.42% 3.32% 3.28% Tax equivalent net interest rate spread 2.77% 2.80% 2.90% 2.88% Tax equivalent net interest rate margin 3.25% 3.30% 3.40% 3.37% (1) Excludes goodwill and other intangible assets. (2) Excludes unallocated ESOP shares and unvested restricted stock shares. (3) Includes operating results for the banking activities segment as defined in the Company's quarterly and annual reports. (4) Includes nonaccrual loans.
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